A general resource for employees and management alike, covering issues old and new in the law of Ontario employment relationships.

Tuesday, September 9, 2014

Magnetawan Clerk was a "temporary" worker, not entitled to notice

In early April, 2009, Mr. Free was appointed to the position of CAO/Clerk of the Municipality of Magnetawan, on what Council understood to be a temporary basis. In July of the same year, another individual was appointed on a permanent basis, and Mr. Free's appointment was terminated.

He sued in, among other things, wrongful dismissal. The action was recently decided by Justice Gordon, with reasons reported here.

The Evidentiary Issues
There were significant disputes about the nature of the discussions leading up to the appointment of Mr. Free. At a late stage in the proceedings, Mr. Free sought to introduce into evidence emails suggesting that the contract was for a three-year-term, and sought to increase his claim accordingly. (I've previously posted about the impact of a fixed term contract on dismissal damages.)

The authenticity of those emails was in question, and Justice Gordon seemed somewhat displeased that there was no forensic evidence entered relating to the emails.

As a side note, I've come across this before: On a file I had some years ago, the opposing party produced a number of emails which my client denied having received...and which, on close review, seemed not to quite fit with the rest of the timeline. I managed to identify a number of irregularities in the printouts, and was able to hypothesize as to how those irregularities arose - in a nutshell, they were simply bad forgeries. In discussing the matter with IT experts, it became clear that it's next-to-impossible to prove the authenticity (or not) of email printouts - a better forgery could easily be generated through a graphic design program. However, an electronic copy of the email would be possible to analyze: For example, I can go into Outlook and save an email I received as a .msg file, and send that (as an attachment to another email, or via a USB key) to an IT expert, who can then examine the metadata in the header to determine its authenticity. Not sure if that would still be possible to forge, but it would be much more difficult. Of course, if you're right that the printout is a fake, then you'll never actually receive it in .msg format, and instead the other side will just claim something like, "Oops, our email server automatically purges them after a period of time. That's why we printed them out." Disproving that becomes a much more onerous task.

Fortunately, in my case, my close review revealed that the date on the face of one of the email printouts was incoherent - the format gave the weekday, and the weekday simply didn't mesh with the remainder of the date. It would be like a document dated Friday, September 9, 2014: Sept 9/14 is a Tuesday, and no properly-functioning computer software could ever assign that date to an automatically-generated email header.

So Justice Gordon was faced, on the one hand, with Mr. Free claiming that this was a genuine email exchange, and on the other hand, the other participant, Mr. Evans (who was no longer with the municipality), saying "I never wrote that."

Classic "he said, she said" credibility dispute, in a sense. Justice Gordon accepted that the emails were not authentic. (Incidentally, Justice Gordon also noted that, in addition to saying 'I never wrote that, and wouldn't write anything like that anyways', Mr. Evans also opined that the date format in the printout was wrong. Justice Gordon accepted that evidence, and in my respectful opinion was probably wrong to do so - different software and different settings can generate any number of date formats, and Mr. Evans does not appear to have been an appropriately qualified expert to give that opinion. However, I don't think that would have changed Justice Gordon's conclusion that he found Mr. Evans to be more credible, which conclusion would be subject to significant deference from an appellate court.)

Therefore, the fixed term contract supposedly established by the emails...wasn't.

What, then, are we left with?

Was the Agreement for "Temporary" Services?

Justice Gordon concludes that the agreement between the parties was 'temporary' in nature - i.e. Mr. Free would fulfil the duties of the CAO/Clerk on a temporary basis until a permanent replacement was found. "Given the temporary nature of the position, and the expectation it would be brief, I conclude no notice of termination was required."

At common law, there's no particular relevance to an arrangement being referred to as "temporary". An employment relationship is either for a fixed term or for an indefinite term, and are presumptively for an indefinite term - as the Supreme Court has put it: The "pattern of conduct now generally accepted and applied by the courts in the absence of evidence to the contrary is one of employment for an indefinite period terminable by either party upon reasonable notice, but only upon reasonable notice."

Conversely, an independent contractor relationship is presumed to be terminable by either party without notice, absent evidence to the contrary.

So there's no category of temporary service. An understanding that the relationship is temporary would arguably affect (as an extended Bardal factor) the reasonable notice period for an employee at common law, but would have absolutely no bearing on an independent contractor.

Was Mr. Free an Independent Contractor?
Mr. Free invoiced Magnetawan through a corporation he had incorporated - the relationship was certainly structured as that of an independent contractor.

The courts generally will look to the actual nature of the relationship to determine whose business it really was - chance of profit/risk of loss, control over the work, ownership of tools, etc. - to assess whether the relationship was actually an employment relationship or an independent contractor relationship.

Justice Gordon was surprisingly brief in his assessment of this issue - not only did he not refer to the legal test, but he also didn't refer to the other factors relevant to consideration under the test. Which surprises me here, because, while I don't think it's necessarily open-and-shut, I might need some convincing that a CAO/Clerk position is really anything other than an employment position.

Justice Gordon determined that Mr. Free was an independent contractor, and thus not entitled to reasonable notice of termination.

To What Damages would Mr. Free be Entitled?
Mr. Free lost, but Justice Gordon went on to assess damages on a 'just in case I'm wrong' basis.

If the contract was for a three year term, his damages would have been $262,800. If it was an indefinite term employment contract, his damages would be pay in lieu of 4 months, or approximately $31,000. Notice periods for short service employees are notoriously unpredictable, and this is well within the reasonable range.

However, from the wording and structure of the reasons, it really does look like Justice Gordon may be creating a dichotomy between 'temporary' and 'indefinite' employment which has not historically existed at law, and concluding that a 'temporary' position does not require notice of termination.

If Justice Gordon is correct that Mr. Free was an independent contractor, all bets are off, and Mr. Free is entitled to nothing. However, if Mr. Free was an employee, then it would be very novel to say "But it was temporary employment, and therefore there was no implied term of reasonable notice." (It would, perhaps, be more aligned with established law to say "But the indefinite term employment was understood to be short-term, and therefore the reasonable notice period is reduced.")

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This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.The author is a lawyer practicing in Newmarket, primarily in the areas of labour and employment law and civil litigation. If you need legal assistance, please contact him for information on available services and billing.